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The Economic Research Institute, Stockholm School of Economics SSE/EFI Working Paper Series in Business Administration

No 2004:4:
Empirical study of an team-based incentive model in the Day Surgical Department at Huddinge University Hospital

Per Arvidsson, Tomas Movin and Christina Rosell

Abstract: The study shows that a team-based incentive model changed personnel attitude and behaviour and increased the productivity in the Day Surgical Department at Huddinge University Hospital. The aims by introducing a team-based incentive model were to increase the productivity, to recruit personnel, to strengthen the team feeling and to commit the staff to work on continuous improvement. A bonus wage system based on production, financial and patient satisfaction in a balanced scorecard was implemented in October 2000. The results shown in the study cover the first year. Quantitative data on production, personnel administration and financial was collected. A questionnaire on patient satisfaction was given to patients. Qualitative data was collected by focused interviews with all personnel in the department and with key persons outside the department. The productivity measured as the surgical procedures/surgical-room hours increased by 7 per cent and the surgical hours/surgical-room hours also increased by 7 per cent. Net income was positive. Financial measured as total costs/surgical hour decreased despite of increased salaries and bonus. The patient satisfaction index was rated high. More employees were recruited than finished their employment. The qualitative analysis demonstrates that the employees had changed attitude with increased responsibility and teamwork resulting in an increased productivity. The reward system achieved a broad acceptance within as well as outside the department. Knowledge about the financial goals and the incentive model and information about related matters are fields for improvement.

The results of increased productivity and the net recruitment of personnel in the study is encouraging. However, the results have to be evaluated over a longer period of time. The future development of the model may include rewards when achieving goals in the work on continuous improvement.

Keywords: Health care; management control; compensation systems; incentive; incentive model; productivity; (follow links to similar papers)

81 pages, March 24, 2004

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